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Proposals of the Board of Directors and the Nomination and Governance Committee to UPM-Kymmene Corporation's Annual General Meeting
UPM-Kymmene Corporation Stock Exchange Release (Other information disclosed according to the rules of the Exchange) 27 January 2022 at 13:00 EET
Proposals of the Board of Directors and the Nomination and Governance Committee to UPM-Kymmene Corporation's Annual General Meeting
UPM-Kymmene Corporation's Annual General Meeting will be held on Tuesday, 29 March 2022, starting at 14.00 EEST in Event Studio Eero (Töölönlahdenkatu 2, Helsinki, Finland. The notice of the Annual General Meeting will be published separately at a later date on the Company's website and as a stock exchange release. Due to Covid-19 pandemic the participation and exercise of shareholder rights in the Annual General Meeting will be possible only by voting in advance and by submitting counterproposals and asking questions in advance in accordance with the instructions given in the notice and otherwise by the Company. It is not possible to attend the meeting in person.
The Board of Directors and the Nomination and Governance Committee of UPM-Kymmene Corporation have today made the following proposals to the Annual General Meeting:
Resolution on the use of the profit shown on the balance sheet and the payment of dividend
The Board of Directors proposes that a dividend of EUR 1.30 per share be paid based on the balance sheet to be adopted for the financial year ending 31 December 2021. The dividend will be paid to a shareholder who is registered in the Company's shareholders' register held by Euroclear Finland Oy on the dividend record date 31 March 2022. The Board of Directors proposes that the dividend be paid on 7 April 2022.
Adoption of the Remuneration Report
The Board of Directors proposes that the Annual General Meeting adopts the Remuneration Report for the year 2021. The Remuneration Report for the year 2021 will be published by a stock exchange release and will be available on the Company's website at www.upm.com/agm2022 as of 1 March 2022.
Resolution on the remuneration of the members of the Board of Directors
The Board of Directors' Nomination and Governance Committee proposes that the remuneration of the Chair of the Board of Directors be raised, and that the Chair of the Board of Directors be paid an annual base fee of EUR 200,000 (previously EUR 195,000). The Board of Directors' Nomination and Governance Committee proposes that the remuneration of the Deputy Chair of the Board and the other members of the Board remains unchanged and that the Deputy Chair of the Board be paid an annual base fee of EUR 140,000 and other members of the Board EUR 115,000.
The Nomination and Governance Committee further proposes that the remuneration of the Remuneration Committee Chair be raised and other annual committee fees remain unchanged and that the members of the Board of Directors' committees be paid annual fees as follows:
- Audit Committee: Chair EUR 35,000 and members EUR 15,000
- Remuneration Committee: Chair EUR 27,500 (previously EUR 20,000) and members EUR 10,000
- Nomination and Governance Committee: Chair EUR 20,000 and members EUR 10,000.
The annual base fee is proposed to be paid in Company shares and cash so that approximately 40% will be payable in the Company shares to be purchased on the Board members' behalf, and the rest in cash. The Company will pay any costs and transfer tax related to the purchase of the Company shares. Shares thus purchased may not be transferred within two years from the purchase date or until the director's membership in the Board has ended, whichever occurs first. The annual committee fees are proposed to be paid in cash. If the term of a member of the Board of Directors terminates before the Annual General Meeting of 2023, the Board has a right to decide upon potential reclaim of the annual fees as it deems appropriate.
In addition, the Board of Directors' Nomination and Governance Committee proposes that travel and lodging expenses incurred from meetings held elsewhere than in a director's place of residence will be paid against invoice.
Resolution on the number of members of the Board of Directors
The Board of Directors' Nomination and Governance Committee proposes that the number of members of the Board of Directors be resolved to be the current nine (9).
Election of members of the Board of Directors
The Board of Directors' Nomination and Governance Committee proposes that the following incumbent directors be re-elected to the Board: Henrik Ehrnrooth, Emma FitzGerald, Jari Gustafsson, Piia-Noora Kauppi, Marjan Oudeman, Martin à Porta, Kim Wahl and Björn Wahlroos. The Nomination and Governance Committee further proposes that Topi Manner be elected as a new director to the Board. The directors will be elected for a one-year term and their term of office will end upon closure of the next Annual General Meeting. All director nominees have given their consent to the election.
Berndt Brunow has announced that he is not available for re-election.
The new director nominee Topi Manner (born 1974) is a Finnish citizen and holds a Master's degree in Economics and Business Administration from the University of Turku. Manner has been the President and CEO of Finnair Plc since 2019. Previously he has been a member of Nordea Group's Executive Management and Head of Personal Banking 2016-2018 and in various executive roles at Nordea 2006-2016. He is board member of Elisa Corporation, board member of Service Sector Employers PALTA and chair of the audit committee of IATA (The International Air Transport Association).
The Board of Directors has assessed the director nominees' independence based on the Finnish Corporate Governance Code's independence criteria and other factors and circumstances to be taken into account in the overall evaluation from both the standpoint of the Company and the nominees. The Board has also taken into account information provided by the nominees.
According to the evaluation carried out by the Board, all director nominees are independent of the Company's significant shareholders as none of the Company shareholders holds 10 percent or more of the Company's shares or votes attached thereto. In addition, according to the Board's director-specific overall evaluation, all director nominees are non-executive and independent of the Company including Kim Wahl and Björn Wahlroos, although they have been, if re-elected, non-executive directors for 10 consecutive years or more. Based on the Board's overall evaluation of these director nominees' independence, their independence is not compromised due to their long service history, and no other factors or circumstances have been identified that could impair their independence.
The biographical details of all director nominees are available at upm.com/agm2022.
Resolution on the remuneration of the auditor
Based on the proposal prepared by the Audit Committee, the Board of Directors proposes that the remuneration of the Company's auditor be paid against invoices approved by the Board of Directors' Audit Committee.
Election of the auditor
Based on the proposal prepared by the Audit Committee, the Board of Directors proposes that PricewaterhouseCoopers Oy, a firm of authorised public accountants, be re-elected as the Company's auditor for a term that will continue until the end of the next Annual General Meeting.
PricewaterhouseCoopers Oy has notified the Company that Authorised Public Accountant (KHT) Mikko Nieminen would continue as the lead audit partner. Mikko Nieminen has held this position since 4 April 2019.
Authorising the Board of Directors to decide on the issuance of shares and special rights entitling to shares
The Board of Directors proposes that the Board be authorised to decide on the issuance of new shares, transfer of treasury shares and issuance of special rights entitling to shares as follows:
The aggregate maximum number of new shares that may be issued and treasury shares that may be transferred is 25,000,000 including also the number of shares that can be received on the basis of the special rights referred to in Chapter 10, Section 1 of the Finnish Limited Liability Companies Act. The proposed maximum number of shares corresponds to approximately 4.7 per cent of the Company's registered number of shares at the time of the proposal.
The new shares and the special rights entitling to shares may be issued and the treasury shares transferred to the Company's shareholders in proportion to their existing shareholdings in the Company, or in a directed share issue, deviating from the shareholder's pre-emptive subscription right, if there is a weighty financial reason for doing so from the Company's point of view, such as using the shares as a consideration in potential mergers or acquisitions, to finance investments or other business-related transactions, to develop the Company's capital structure, or as a part of the Company's incentive plans.
The Board of Directors may also decide on a share issue without payment to the Company itself. In addition, the Board may decide to issue special rights referred to in Chapter 10, Section 1 of the Finnish Limited Liability Companies Act, which carry the right to receive, against payment, new shares in the Company or treasury shares in such a manner that the subscription price of the shares is paid in cash or by using the subscriber's receivable to offset the subscription price.
The new shares may be issued and the treasury shares transferred either against payment or without payment. The directed share issue may be without payment only if there is an especially weighty financial reason for doing so from the Company's point of view and taking the interests of the Company's all shareholders into consideration.
The subscription price of the new shares and the amount payable for the treasury shares shall be recorded in the reserve for invested non-restricted equity.
The Board shall decide on all other matters related to the issuances and transfers of shares and special rights entitling to shares. The authorisation will be valid for 18 months from the date of the resolution of the Annual General Meeting. If this authorisation is granted, it will revoke the authorisation to decide on the issuance of shares and special rights entitling to shares which was granted to the Board of Directors by the Annual General Meeting on 30 March 2021.
Authorising the Board of Directors to decide on the repurchase of the Company's own shares
The Board of Directors proposes that the Board be authorised to decide on the repurchase of the Company's own shares as follows:
By virtue of the authorisation, the Board may decide to repurchase a maximum of 50,000,000 of the Company's own shares. The proposed maximum number of shares corresponds to approximately 9.4 per cent of the Company's registered number of shares at the time of the proposal. The authorisation includes also the right to accept the Company's own shares as a pledge.
The Company's own shares will be repurchased in public trading otherwise than in proportion to the existing shareholdings of the Company's shareholders at the market price quoted at the time of purchase on the trading places where the Company's shares or certificates entitling to its shares are traded, using the Company's non-restricted shareholders' equity. The purchase price for the shares will be paid according to the applicable rules of the trading places where the shares have been repurchased.
The shares will be repurchased to be used as a consideration in potential mergers or acquisitions, to finance investments or other business-related transactions, to develop the Company's capital structure, or as a part of the Company's incentive plans, or to be retained by the Company as treasury shares, transferred or cancelled.
The Board shall decide on all other matters related to the repurchase of the Company's own shares. The authorisation will be valid for 18 months from the date of the resolution of the Annual General Meeting. If this authorisation is granted, it will revoke the repurchase authorisation granted to the Board of Directors by the Annual General Meeting on 30 March 2021.
Resolutions on the partial amendment of the Articles of Association
The Board of Directors proposes that the Annual General Meeting would decide to amend article 8 (Auditor). Following the stipulations of the EU Audit Regulation, the last year that PricewaterhouseCoopers Oy can act as the Company's auditor is 2023. As the rotation of the statutory auditor governed by the Audit Regulation approaches, the Board of Directors proposes that article 8 of the Articles of Association be amended to allow the Annual General Meeting to elect auditor also in advance for a term of one financial period. The proposal of the Board of Directors to amend article 8 also includes a reference to the Finnish Patent and Registration Office being the authority approving the auditor by operation of law.
The Board of Directors also proposes that the Annual General Meeting would decide to amend article 11 (Annual General Meeting) of the Articles of Association so that the Annual General Meeting shall decide, in addition to the items currently listed in article 11 of the Articles of Association, on the adoption of the remuneration policy, when necessary (amended article 11, second paragraph, new sub-item 6), on the adoption of the remuneration report (amended article 11, second paragraph, new sub-item 7), and that the numbering of current sub-items 6-10 of the second paragraph of article 11 be changed accordingly due to the above-mentioned amendments.
The current and proposed new wordings of the above-mentioned articles of the Articles of Association are available on the Company's website at upm.com/agm2022.
Authorising the Board of Directors to decide on charitable contributions
The Board of Directors proposes that the Board be authorised to decide on contributions not exceeding a total of EUR 500,000 for charitable or corresponding purposes and that the Board be authorised to decide on the recipients, purposes and other terms and conditions of the contributions. Contributions would be primarily granted under the Company's Biofore Share and Care programme whose focus areas are reading and learning, engaging with communities and Beyond Fossils initiatives.
The authorisation is proposed to be valid until the next Annual General Meeting.
UPM-KYMMENE CORPORATION
BOARD OF DIRECTORS
UPM-Kymmene Corporation
Pirkko Harrela
Executive Vice President, Stakeholder Relations
UPM, Media Relations
Mon-Fri 9:00-16:00 EET
tel. +358 40 588 3284
media@upm.com
UPM
We deliver renewable and responsible solutions and innovate for a future beyond fossils across six business areas: UPM Biorefining, UPM Energy, UPM Raflatac, UPM Specialty Papers, UPM Communication Papers and UPM Plywood. As the industry leader in responsibility we are committed to the UN Business Ambition for 1.5°C and the science-based targets to mitigate climate change. We employ 18,000 people worldwide and our annual sales are approximately EUR 8.6 billion. Our shares are listed on Nasdaq Helsinki Ltd. UPM Biofore – Beyond fossils. www.upm.com
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